Zoetis Inc. (ZTS) Stock Analysis

Zoetis holds a leading position in the global animal health market, underpinned by several durable competitive advantages. First, its product portfolio is both broad and deep: Zoetis offers approximately 300 product lines across seven major categories, with 68% of 2024 revenue from companion animals and 31% from livestock. This diversification reduces reliance on any single product or species, unlike Elanco or IDEXX, which are more concentrated.

Innovation is a core strength. Zoetis invests heavily in R&D—$686 million in 2024, or 7% of revenue—enabling a steady pipeline of new products and lifecycle enhancements. Notably, Zoetis has launched industry-first therapies such as Librela and Simparica Trio, and maintains 5,500 granted patents. This innovation engine has supported a compound annual revenue growth rate of 8% since its 2013 IPO, outpacing the animal health market’s 5% CAGR.

Zoetis also benefits from scale and global reach, with direct sales in 45 countries and products sold in over 100. Its field force of 4,050 and strong customer relationships foster high brand loyalty, which is critical in a market where veterinarians and producers value reliability and efficacy.

Compared to rivals, Zoetis consistently delivers superior profitability—2024 operating margin was 36.6% versus Elanco’s low teens—reflecting pricing power, manufacturing efficiency, and a customer-centric culture. These factors collectively reinforce Zoetis’s competitive moat.